The deal between the Resorts World Catskills (RWC) in New York and Genting Malaysia has cleared the first hurdle. The deal has got the green light from the RWC shareholders except for David Mullen. David has filed a lawsuit against the parent company Empire Resorts and is trying to stop the sale of RWC. Thanks to this the casino would be taken as private of course when the paperwork is signed between Empire Resorts and Genting Malaysia.
After the bankruptcy problem, the Empire Resorts agreed to set a deal with Genting Malaysia. As per the deal, the Malaysia based operator would have to pay $128.6m to get the ownership of the property. However, the acquisition required the approval of the RWC shareholders. The shareholders have now voted to reject the protection from bankruptcy. This clearly means a ‘Go Ahead’ for the deal with Genting Malaysia.
The new agreement would ensure that 49% of the ownership stake would be with Genting Malaysia whereas the remaining 51% would be with K.T.
Lim, the owner of the Genting Malaysia. He would take over the ownership with his Kien Huat Realty Trust III. He is also the Chairman of Genting Malaysia. Interestingly, he owned 84.7% of Empire Resorts previously of course through the same trust.
The total sales transaction is $9.74 per share as per the deal. However, this is where David Mullen has gone against. He pioneered the lawsuit and said that Empire Resorts did not look after the shareholders and irresponsibly handled it by undervaluing the property. He said that the Empire Resorts intended to close the deal as soon as possible. After Mullen, others followed lawsuits as well.
As per the shareholders, another deal was discussed a year ago. The deal has come as a reference to the shareholders and has been filed as evidence. It said that the Bet365 offered to buy $50m in common stock of Empire Resorts. Kien Huat Trust, on the other hand, agreed to purchase $126m in convertible preferred stock. As per the shareholders, the price as per this deal would have been close to $20 per share.
However, what has been negotiated now is less than half now. This has caused the issue and now lawsuits have been filed reported Calvinayre.
One of the lawsuits said that the proposed transaction has allowed being coerced with the Kien Huat Trust rather than seeking Value Maximization of the company.
Genting Malaysia, however, is betting big on Empire Resort’s RSW. They are willing to write the comeback story of New York. The unmatched experience for the customer at a venue which is just 90 minutes from Manhatten is itself a great deal. The company is hopeful to make it a big success. They are also confident that the economic challenges that have come along with RSW would be resolved.
With the backing of most of the shareholders now, it is understood that Empire Resorts is close to ending the deal with Genting Malaysia and RSW is ready for a new era.